Israel Offshore Gas Prompts Squabble With US

JERUSALEM - Recent discoveries of large natural gas reserves off Israel's coast have set in motion a battle between investors and the government over how to divide up the profits, The Washington Post reports.

The finds could be significant. Israel has long been a resource-poor island in the energy-rich Middle East, reliant largely on coal imported from far away in part because of an Arab League boycott. Only Egypt, with which Israel has a peace treaty, exports natural gas to the country.

But the initial euphoria over the prospect of energy independence for Israel is being overshadowed by the dispute between Israeli officials who want to increase the state's share of the profits and U.S. and Israeli investors who say the government's stance threatens Israel's status as a safe place to invest.

Some have estimated the value of recent finds by a consortium led by Texas-based Noble Energy at $300 billion. They could represent only a fraction of the natural gas lying beneath the seafloor in the eastern Mediterranean, which, according to the U.S. Geological Survey, might contain one of the world's largest untapped gas reservoirs.

The prospect that Israel might tap more deeply into the revenues has set in motion a commercial dispute between the Israeli and U.S. governments, with the U.S. Embassy in Tel Aviv warning against any rewriting of the rules.